Philippine Market Outlook Sept 4, 2018

MARKET OUTLOOK

Local equities slumped on the first trading day of September as investors awaited the release of August inflation data, which is expected to clock in another fresh high.

The Philippine Statistics Authority is scheduled to release inflation data for the month of August on Wednesday, Sept. 5.

Preliminary figures already indicate that last month’s results were faster than July’s 5.7%. The central bank’s Department of Economic Research last Friday said headline inflation likely fell within the range of 5.5% to 6.2%, higher than the central bank’s 5.1% to 5.8% estimate last July.

A poll of economists meanwhile yielded a median inflation estimate of 5.9%, matching the Department of Finance’s estimate announced on Monday.

Market participants are also wary of the effect of the stronger dollar and a possible rate hike from the US fed to the global trade as the rift between US and China as well as Canada remains unsettled.

With U.S. markets closed for Labor Day, as well as worries over the escalation of trade disputes between world powers and a deepening sell-off across emerging market currencies, trading activity may generally be subdued.

As the market heads into a new week and month, trade concerns will remain front and center of investors' minds, along with increasing concerns about stability in emerging markets.

There are a few existential threats to the world and a broad based trade war is one.